Baroness Scotland of Asthal: My Lords, we have a clear understanding of the sorts of applications that are likely to be made. We have made appropriate provision. We will still have the check-and-send service that noble Lords will know is available from post offices across the country, so we will be able to check the biographical footprint first. The processes that we are now adopting will be appropriate, quick and speedy. No applicant should have to travel for more than about one hour. If they do, special provisions will be made available for remote communities. All the planning is well in place.

Baroness Royall of Blaisdon: My Lords, this is an important, strategic time in our discussions with India. It is not, as such, a reward for India; it is a development of our policy towards India, which we believe will have, as do many of our partners, very many important international repercussions. We believe that this is a good time to grasp the nettle of negotiations with India, but that does not mean that we are diminishing in any way our intentions to achieve agreement with our other partners on elements of the nuclear non-proliferation treaty.

Baroness Park of Monmouth: My Lords, does the Minister agree that despite the assurances of the Russians now, it was the Russians who gave India the cryogenic rocket motors, despite its promises not to do so some years ago? I hope that the Government will be wary of any Russian assurances on this issue.

Baroness Gardner of Parkes: asked Her Majesty's Government:
	What progress has been made on the introduction of housing information packs; and whether, prior to their introduction for all home sales, there will be a full assessment of their effectiveness and benefits based on the results of the pilot scheme?

Lord Campbell-Savours: My Lords, what is happening with building-society acceptance of the survey report?

Baroness Andrews: My Lords, the Council of Mortgage Lenders has worked very closely with us at each stage. It is very important that we are on-side with them. We have never denied that there will be a need for a valuation, because valuations, particularly for higher loans, are important. We have said that the home condition report, with its solid information in an electronic format, with new ratings and an energy certificate, will make it easier for mortgage lenders to do the sorts of surveys that do not always require a site visit but can be done from the desktop or drive-by, which they are increasingly doing. That will make the business of evaluation swifter and, hopefully, less costly.

Baroness Andrews: My Lords, the first-time buyer is obviously in the most vulnerable position in the market. With 30 per cent of transactions falling through, we are wasting £1 million a day. First-time buyers are right in the line for that. Having a system that enables them to discover the condition of the house that they are buying—not down the line, but right up front—will help them a lot. In our plans for expanding home building, we have in mind the first-time buyer—the 30-year-old who will not be able to afford to buy a house in five years' time unless we address those market inequalities.

Baroness Hanham: My Lords, in the Minister's experience so far, who is drawing the packs together? Is it the estate agents who are trying to sell the house, or the legal advisors or solicitors involved in the sale or purchase? If it is independent bodies, who are they? Do they all charge fees?

Lord Brabazon of Tara: My Lords, I beg to move the Motion standing in my name on the Order Paper. This report is mainly concerned with the Speakership of the House, and I will say a few words about that important matter. The report implements the House's decision, on 31 January this year, to approve the report of the second Select Committee on the Speakership, chaired by the noble and learned Lord, Lord Lloyd of Berwick. It covers two main issues.
	First, on the process of election, your Lordships will see that what we propose follows very closely the now-familiar process for by-elections involving the whole House. The main difference is that candidates will require a proposer and a seconder. I should draw attention to the proposed timetable: polling day on Wednesday 28 June, with the result announced on Tuesday 4 July.
	Secondly, on the central issue of the Speaker's role in the Chamber, the Committee has done no more than to set out in the language of the Companion what the Select Committee recommended. In the proposed text on page 6 of the report, I draw attention to paragraph 2:
	"The Speaker has no power to act in the House without the consent of the House".
	This is based on Standing Order 19, which the Select Committee recommended should be repealed. It makes it as clear as possible that the change in our Speakership will have no effect on self-regulation.
	The report also deals with the Speaker's role in Private Notice Questions. As it says, the House has already decided, on the basis of the Lloyd report, that the preliminary decision whether to allow a PNQ will be taken by the Speaker rather than the Leader. I beg to move.

Lord Brabazon of Tara: My Lords, I am grateful to both noble Lords who have spoken for their general acceptance of the report.
	Both the noble Lords, Lord Cope and Lord Trefgarne, not unnaturally regret the departure of the Lord Chancellor but, sadly, that is something that we have to get used to. It has been decided by the House on more than one occasion that we should proceed down the route of having a Speaker. We will remain self-regulating as we are now.
	As the noble Lord, Lord Cope, said, there are at least two more debates to come on the issue of the Speakership. Some interesting amendments have already been tabled for the debate next Tuesday on the Speaker's salary and it will probably be a more lively debate than today's. However, that is for next Tuesday, not today, so I do not intend to say anything more about it.
	I did not mention introductions in my little speech but, as the noble Lord, Lord Cope, said it is a sensible move, and it will enable Peers to be introduced at eleven o'clock on a Thursday morning, which they will be able to follow with lunch instead of having a curtailed lunch before their introduction. I hope that will be popular.
	On PNQs, I disagree with the noble Lord, Lord Trefgarne, when he hopes that there will be many more. In fact, the noble Lord is wrong because a PNQ was recently allowed by the Leader of the House. It was asked by the noble Baroness, Lady Anelay, on some aspect of a Home Office Bill within the past few months. I hope that reassures the noble Lord, Lord Trefgarne. I commend the Motion.

Viscount Astor: My Lords, in moving Amendment No. 1, I shall speak also to Amendments Nos. 3 and 14. The main aim of these amendments is to ensure that the Big Lottery Fund is officially established on the same footing as the other distributing bodies with the same amount of prescription by the Secretary of State. Amendment No. 1 removes the description of Big Lottery Fund expenditure as "prescribed". Amendment No. 3 takes out Clause 7(3), which describes what prescribed expenditure is. That subsection states that,
	"'prescribed expenditure' means expenditure of a description prescribed by order of the Secretary of State",
	which means that the whole of the 50 per cent of lottery distribution going to the Big Lottery Fund should be prescribed by the Secretary of State. That subsection also allows for the prescription of devolved expenditure. Amendment No. 14 attempts to establish the Big Lottery Fund on the same footing as other distributors.
	We debated these issues in Committee and at Second Reading. As your Lordships will remember, the original lottery distributing bodies were set up to comply with directions on matters to be taken account of when distributing lottery funds. The funds had to comply with directions relating to their management in terms of accounting, the delegation of powers, and so on. That was also how the Community Fund was set up by the Government when they changed from four original good causes, and how the Millennium Fund, which has come to an end, was set up. But when the New Opportunities Fund was set up by the Government, there was a greatly increased level of prescription. The New Opportunities Fund had to comply with directions from the Secretary of State on all matters including the distribution of grants. We always felt that it was entirely reasonable that the Secretary of State could tell distributing bodies what to consider when awarding grants, and intervene directly to correct mismanagement or unacceptable accounting practices. That was part of the original Act when it went through this House creating the National Lottery.
	The Government gave themselves a lot more powers over the New Opportunities Fund, however. The Minister has said on a number of occasions that they are backstop powers that will not be used, but when we make other suggestions, he says that there must be entire flexibility in these matters. Unfortunately, the Government cannot have it all ways on the Bill at the same time. The logic of their arguments does not stand up to scrutiny. It worries us because we know that when they originally looked at introducing the Bill, the Government planned to create one distributing body—a vast Big Lottery Fund, which would distribute all the lottery money. Luckily, that plan has been shelved, but it may have been shelved only for the moment—who knows?
	The Government have, as we have heard before, broken their own rules on additionality. Indeed, almost everyone involved in the lottery has admitted that that has happened—the only people who have not admitted it are the Government, but it is clear that it has happened. We know that from a recent reply to a Written Question from my noble friend Lord Howe about how money was awarded for projects affecting the health service. Until quite recently, the DCMS website used to highlight that the Government were investing £2 billion of public and National Lottery money in sport by 2006. That has now been changed. It now says that £3 billion is being invested in sport by 2006, coming from both the Government and the National Lottery. That is an improvement.
	The Government have given themselves much greater powers over the distributing body. They cannot argue that they need those powers over one distributing body rather than over the other two. The argument that they need it because it is bigger is not good enough. We ought to be talking in this Bill about principles. The principle should be that National Lottery expenditure should be additional. The Government should not be involved. We all know that there are problems when the Government are not involved—that there are National Lottery projects that are turned down that we would individually like to support, and that some go through that we find somewhat objectionable. That is the nature of the system and we have to accept that that will always happen. At the same time, some projects are more successful than others. However, if we are to create an independent body which is independent of government, we will have to accept those aspects as being part and parcel of the process.
	I am afraid that the Government do not have a good record. They have interfered. They have encouraged the use of National Lottery money in ways that are clearly not additional. We find that there is no good excuse for the Government giving themselves these powers, which are over and above what was ever considered when the original National Lottery was established. They are powers that are greater than for the other distributing bodies. They are not necessary and it is not good enough for the Government to say that they are a backstop and a reserve. If the Government really felt that 50 per cent of the lottery funds in this country were being misspent, they ought to come back to Parliament with a new lottery Bill. That is why my amendments are necessary. I beg to move.

Lord Clement-Jones: My Lords, we on these Benches agree with the noble Viscount, Lord Astor, that the Bill in its current form constitutes an unacceptable level of government control over funding from the Big Lottery. In Committee, the Minister talked of broad categories, high-level themes and a broad strategy, not detailed prescription. His final throw was a framework for the devolved administrations. However, we are not actually talking about the Government's intentions in the Bill but about the Government's powers in it and the possible exercise of those powers. That is the right way to look at the Bill.
	The concordance makes it absolutely clear that these are additional powers to prescribe in greater detail within the broad categories set out in Clause 22 as it would be amended. That is the big problem. Why does moving from some 33.3 per cent of the lottery proceeds to 50 per cent justify these increased powers? Nowhere, certainly not in Committee, has the Minister justified why that should be the case, so he has not explained the position properly. He has talked about the need for such powers of prescription in view of the money involved and so on. But in the previous 1993 Act, as amended, those powers do not exist for the New Opportunities Fund.
	I recognise that the noble Baroness, Lady Pitkeathley, who I am sorry is not in her place today, said that a light touch was in practice exercised by the Government. I do not believe that that is necessarily relevant in this case. Governments then did not have the powers they are giving to themselves in the Bill. That is essentially the concern of the voluntary sector, which is so well reflected in the amendment put before the House today.

Lord Davies of Oldham: My Lords, I am grateful to both noble Lords who have contributed to the debate, although I must say that I have not heard arguments today which are very different from those presented in Committee. Therefore, I am sure noble Lords will not be surprised that my response is very much along the lines of the response I made in Committee, if only for the purpose of consistency.
	Amendments Nos. 1 and 3, as the noble Viscount, Lord Astor, pointed out, seek to remove the Secretary of State's power to prescribe expenditure regarding the new Big Lottery Fund good cause; and Amendment No. 14, which I am pleased to see included in the group, would provide that the Big Lottery Fund must take into account rather than comply with any direction given to it by the Secretary of State.
	It was not just in Committee that these issues were discussed; there was intensive discussion in the other place. I recognise the strength of feeling on the other side of the House on these matters, but we also feel strongly that the concerns that have been expressed are unfounded. We have had a considerable time to consider these arguments since they were first voiced in the other place some time ago.
	Noble Lords are speculating on the powers in Clauses 7 and 14 and how they will be used. We think that we have taken out the issue of speculation because we have published an illustrative draft order and directions. We sent these out to all noble Lords interested in the Bill and of course placed them in the Library. It is open to noble Lords to be suspicious about the Government's intentions, but suspicion is usually based on the fact that information is being withheld. I do not think that the Government could have been more open than they have been about how they intend to interpret this Bill if it becomes an Act in terms of the order and directions which we will employ.
	Every commitment that we have given, even those where the commitments are firmly on the record in this House or another place, are largely being disregarded. Therefore, I do not think it is for me to make a very long speech today against these amendments. Without the power to prescribe expenditure, the Big Lottery Fund would be given 50 per cent of all the lottery good-cause money to spend on anything that is charitable or connected with health, education or the environment without any further recourse to Parliament. I understand that the noble Lord, Lord Clement-Jones, views this with complete equanimity. The Government disagree with him. We do not think that it makes sense.
	The large new spending area of health, education and the environment, which we created in 1998, has of course proved popular and successful. It has enabled thousands of worthwhile projects to be funded, including ones which have benefited more than 30,000 World War II veterans, war widows and carers. It has helped to provide more than 2,100 village halls and community buildings. The new Big Lottery Fund good-cause funding brings these areas and the charitable expenditure distributed by the Community Fund together, allowing an enormous range of projects to be encompassed. This is a good thing, and it is one of the main reasons why we wanted to bring the Community Fund and the New Opportunities Fund together. But it creates a very different kind of good cause from the existing arts, sport and heritage good causes. Arts, sport and heritage are much narrower areas, and the existing legislation narrows things further by prescribing sums to be distributed by different distributors. As I said in Committee, this not only limits who can spend the money, but restricts what the money can be spent on. For example, prescribing the percentage to be distributed by the UK Film Council in effect prescribes the percentage of money for the arts good cause that must be spent on film.
	In 1993, Parliament took the view that such arrangements were necessary to ensure the effective distribution of lottery money. That degree of prescription has obtained in the lottery since its inauguration. The powers we are proposing in the Bill have a similar effect, and we believe that they are just as necessary now as they were in 1993. We need to be able to set out at the highest level the types of expenditure that the Big Lottery Fund should focus on. I emphasise that we are obviously talking about broad areas of expenditure. We are not talking about programmes or projects, or about the split between the four parts of the good-cause funding or between the four countries of the United Kingdom, and we are certainly not talking about specific grants. We have made an illustrative order demonstrating how the power to prescribe expenditure will be used in practice.
	We could not be clearer about our intentions, and I fail to see what more we could do to assure noble Lords on the opposition Benches. Yet, to my knowledge, no one has found anything concrete to object to. I take that as evidence that the concerns we have heard so much about do not have much basis in fact. It was suggested in Committee that the Bill would give the Government more power over the Big Lottery Fund than was afforded over the New Opportunities Fund in the 1998 Act. I contend that that is simply not so. The 1998 Act limited the New Opportunities Fund's spending to initiatives specified by order by the Secretary of State. Those initiatives tended to be much more narrowly focused than the broad themes we are proposing for the Big Lottery Fund.
	I am in no way saying that the approach towards the New Opportunities Fund was wrong. Indeed, it was very successful. It provided a strategic focus for lottery funding, and had a much more prescriptive approach than the one we are proposing in the Bill for the Big Lottery Fund. The noble Lord, Lord Clement-Jones, mentioned that my noble friend Lady Pitkeathley was not here; I regret that too. Oh! I am glad that she is present. She has considerable experience of these issues, and she made it quite clear in Committee that the New Opportunities Fund experienced no government interference in specific expenditure. I should also make it clear that the ability to prescribe devolved expenditure is central to devolving more decision-making to Scotland, Wales and Northern Ireland, which is the aim of the Bill. I am afraid that Amendments Nos. 1 and 3 would mean that the devolution arrangements in the Bill would not work. They would retain power for the Secretary of State just where the Government intend to devolve it. That seems somewhat ironic, given the Opposition's perceptions, which we have all heard, of the Secretary of State's excessive control. We cannot accept Amendments Nos. 1 and 3, and I ask noble Lords to consider not pressing them to a vote.
	Amendment No. 14 would require the Big Lottery Fund to take into account, rather than comply with, any direction given to it by the Secretary of State. All lottery distributors are required to comply with directions about financial and operational matters, which are set out in new Section 36E(3). Such financial directions incorporate financial controls designed to protect public money by insuring that distributors comply with basic financial and operational good practice. The requirements placed on the Big Lottery Fund by new Section 36E(3) are exactly the same as those placed on other distributors in Section 26 of the original 1993 Act, which set up the lottery. We do not see any reason for change.
	Section 36E(2) sets out the powers to issue policy directions. I emphasise that the powers have been drafted in the way that they have in order to bring together the different regimes of control that existed over the Big Lottery Fund's prior bodies, and to bring them together in a coherent way. Both the Community Fund and the New Opportunities Fund had to comply with policy directions. The Community Fund, like other lottery distributors, was required to comply with any directions given to it by the Secretary of State as to the matters to be taken into account and to determine the persons to whom, the purposes for which, and the conditions subject to which it distributed the money.
	The key difference between that requirement and those set out in the present Bill is in the matters to be taken into account. A statutory requirement to comply with directions as to the matters to be taken into account is a real legal obligation. The Community Fund could not pick and choose which direction it complied with; it had to take all the policy directions into account and could decide to ignore them only under exceptional circumstances.
	This debate has therefore become overly focused on a narrow point, when the real issue is how the powers of directions will be exercised. We have given repeated commitments that we will adopt a light touch on direction of the Big Lottery Fund—we said so in stages of the Bill in the other place, I said so in Committee in your Lordships' House, and I reiterate the point today. We demonstrated our integrity with the issue of new interim policy directions for the New Opportunities Fund and the Community Fund. These directions are, as far as possible under the existing legislation, the same as those we will issue in due course to the Big Lottery Fund, and our intention is set out clearly in the illustrative directions that we have made available to the House and which we propose to introduce after Royal Assent.
	Both the interim and illustrative directions are very different from the type of directions issued in the past to the New Opportunities Fund, although those were also applied with sensitivity and consideration. They provide the means by which the funding outcomes and priorities agreed with the Government and supported in the Big Lottery Fund's consultation will be delivered. But they do not—and I emphasise this point again—prescribe how they should be delivered, or preclude other worthwhile priorities being funded. They will allow the fund full scope to make decisions on programmes, choose delivery mechanisms, identify partners and select projects informed by intensive public consultation.
	In conclusion, I hope we can focus on the real issue and put this matter to bed now once and for all. I hope that noble Lords will recognise that we are not being overly prescriptive; we are making it quite clear how these powers will be exercised and I hope that with that level of reassurance the noble Viscount, Lord Astor, will feel able to withdraw his amendment.

Viscount Astor: My Lords, this amendment concerns the possibility of a fund to support national acquisitions. Your Lordships will remember that in Committee I moved an unsuccessful amendment to return the lottery to supporting the original four good causes, which would have increased the amount of money going to the National Heritage Memorial Lottery Fund to 25 per cent. I also moved an amendment which would have enabled a fund to be set up for national acquisitions. That is a problem that the Government occasionally make noises about but have failed to come up with any form of policy on. This is my attempt to tease out of them some form of commitment that they will do something either now or in the future.
	The problem is that over time the government grant to the National Heritage Memorial Fund—not the lottery part of it, but the memorial fund—has declined from its highest level of £20 million to £5 million a year. That is the fund that enables the National Gallery, or institutions like that, to get a grant to fund or part-fund when objects may go abroad which the Export Reviewing Committee, which was set up by the Government, has recommended should stay in this country. That happens more and more. Just last week the Culture Minister, Mr Lammy, placed a two-month export ban on a large silver plateau marking a British victory in the Anglo-American war of 1812. The ban provides the last chance to raise £696,000 required to save that important antique. However, two months is a very short time to save that object or, indeed, any object. There is a problem.
	The lottery part of the National Heritage Memorial Lottery Fund is not able easily to fund acquisitions. It has already been criticised by the Government for having too much unspent capital. The Government say that lottery distributors should cut unspent funds. In many cases that is a good thing, but if you are trying to build up a reserve or an emergency fund, it is not terribly helpful.
	My proposal is simple: to allow money to be allocated from the Big Lottery Fund—which, after all, is now taking the majority, the 50 per cent—for the purposes of national acquisitions, as defined by the rules of the National Heritage Memorial Fund. The matter would be managed by the National Heritage Memorial Fund, so there would be no question of involving the Big Lottery Fund on a project by project basis in deciding who should get a grant. Under the rules of the National Heritage Memorial Fund it is clear that the measure would be applied only for objects of outstanding national importance, as defined by the Reviewing Committee on the Export of Works of Art, which is a government committee. My amendment seeks to set up a fund that is, in effect, ring-fenced for that purpose. Under the amendment, balances could be built up to enable the fund to be prepared to make acquisitions as we all know that certain collections in this country will be in danger in the future. The Treasury accepts works of art in lieu of taxes, but that measure is also cash-limited. Should a large number of objects come on to the market in any one year, either due to owners' deaths or owners who wish to sell, the low ceiling of the Treasury's measure would be gone through very quickly.
	I hope that the Government will be sympathetic to the amendment in principle and will tell us how they seek to solve the problem. I accept that my amendment might not be the right way to do so or that it might not be well drafted. However, I hope that the Government will address the principles of the concerns that I have outlined. I beg to move.

Amendment, by leave, withdrawn.
	[Amendment No. 3 not moved.]
	Clause 8 [Reallocation of funds]:

Viscount Astor: My Lords, this simple amendment prevents money in outstanding balances from being used by being moved from one distributor to another. As the Minister said, this is a reserved power, only to be deployed in extreme situations. The Government always want these powers just in case, but we believe that if that happened the whole distributing mechanism of the lottery would be in such chaos that the Government would have to come back to Parliament, and it is right that they should do so rather than give themselves this power.
	A secondary concern—the Minister may be able to help the House on this—is that the Government set up funding for the Olympics from the distribution fund and we are always concerned that they will get their sums wrong or there will be overspending on the Olympics, which would be a way of the Secretary of State topping up the Olympic lottery fund. It would be helpful if the Minister could say that there is no chance of that happening by a redistribution of balances. I beg to move.

Lord Borrie: My Lords, in the face of such an excellent team of right reverend Prelates here this afternoon, I hesitate to say that I was not as persuaded as the noble Lord, Lord Clement-Jones. The amendment is to add the phrase, "such other persons as he"—the Secretary of State—"thinks appropriate", to the list of people that he shall consult on the reallocation of funds. If this had been expressed in objective terms, I might have seen that it had a point. Given that the amendment is expressed as simply adding that phrase, and that—I think I am right in saying—the Secretary of State, under this clause and any other such powers, is always entitled to consult whom he thinks fit, what does this add to the normal procedure? On the argument of the right reverend Prelate and the noble Lord, Lord Clement-Jones, it would mean that we have to add that rather pointless subsection to every Bill.

Lord Davies of Oldham: My Lords, I will stick to the main theme first and move to that subsidiary one later.
	I owe the right reverend Prelate the Bishop of Sheffield, a response to his amendment. He will recognise that at our preceding stage his colleague the right reverend Prelate the Bishop of Southwell and Nottingham, had pointed out that were the Government ever to seek to use the proposed allocation power, there might be other interested parties apart from the distributing body from which the funds were being transferred, the body or bodies intending to receive the transfer and the administrations in Scotland, Wales and Northern Ireland.
	We accepted that there might be a wider range of interests. For example, Ministers for arts, sports and heritage would have a legitimate interest in the proposed use of reallocation power in their sectors. As I said in Committee, the wider sectors would have ample opportunity to make representation without this amendment. It is intended that any use of the proposed reallocation power would be subject to affirmative resolution, meaning that these matters would have to be debated subject to approval both in your Lordships' House and in another place. The proposed use of the power would be fully within the public domain well before it could be implemented and consequently it would be possible for all to comment upon it. I hear what my noble friend Lord Borrie says when he regards this as otiose because the Secretary of State has powers to consult but it is at times important that we identify specific interests that need to be taken into account.
	I am indicating that specific interests are taken into account as well as the mechanism by which effect is given to these proposals. They are subject to parliamentary debate and approval. That should allay anxieties. It particularly allays the anxiety that any Secretary of State might have Pharaoh-like powers. Secretaries of State change over time, as we have noticed, and it may be that they do not have all have excellent memories or that they are not briefed on what their predecessors said. But there is a world of difference between Pharaoh's Egypt, where arbitrary decisions could be taken by the powers that be, and a parliamentary democracy where we have built into the legislation the understanding that there must be public debate about this issue before the power can be used. I am not sure that Pharaoh could have tackled Joseph on the basis of these procedures.

Lord Davies of Oldham: My Lords, we are talking about a slightly different area of power. We have the power in the Bill as a consequence of the way of the way action is taken subsequent to the decision being taken. I take on board the noble Viscount's point. If he proves to be right—and I think he would give due acknowledgment to my noble friend Lord Borrie and what he has identified is a quirk or idiosyncrasy that has crept into the Bill affecting its overall consistency, which happens from time to time—I shall address my mind to that and will table an appropriate amendment at Third Reading. At this stage, the noble Viscount should rest assured that we have taken his point on board and will look at it.

Lord Clement-Jones: My Lords, in Committee, we had a fair degree of debate about the provisions of Clause 11, which has various purposes, but is essentially designed to ensure that the National Lottery distributors take a greater part in publicising aspects of the National Lottery. When the Minister described this in Committee, he said:
	"We have made it clear many times that distributors will not be in the business of promoting the National Lottery games".
	He continued:
	"Clause 11 will ensure that all lottery distributors can take part fully in the activities of the National Lottery Promotions Unit, which seeks to raise positive awareness of, and support for, the benefits of National Lottery good cause funding across the country".—[Official Report, 13/3/06; col. 1043.]
	I do not think that anybody would disagree with that. It is only when you turn to the provisions of the Bill that any doubt arises. Clause 11(c) mentions,
	"encouraging participation in activities relating to the National Lottery in general".
	That is when doubts begin to creep in. Those words are very broad. It does not say "encouraging participation in projects funded by the National Lottery in general" or something more specific. It really does not reflect the Minister's assurance.
	Clause 11(c) makes it looks as though the National Lottery distributors could encourage participation in the National Lottery itself. That is what voluntary organisations are concerned about. They do not believe that this wording is sufficiently concise or precise to set out what the Government's real intentions are. This amendment clearly is a blunt amendment. It would be very helpful if the Minister could indicate whether, as the Bill proceeds to Third Reading, the Government will come back with a more concise amendment to that particular paragraph. There really is a great deal of ambiguity about the provision and it does not reflect the assurances that the Minister gave in Committee. I beg to move.

Lord Clement-Jones: My Lords, clearly my noble friend Lord Phillips is a pushover. I do not recall having a copy of that letter. I have looked through my file of letters from the Minister, of which there are many and all of them greatly welcome, but I do not see a copy of the letter to my noble friend Lord Phillips.
	What is interesting about the Minister's reply, which he clearly took great care in putting forward, is that by and large it is completely irrelevant. It relates to subsection (b) of that particular clause, almost entirely:
	"publishing information relating to the distribution of money under this Act or the expenditure of money distributed under this Act".
	I have no argument whatever with that subsection. I welcome the Minister's speech; I always welcome the Minister's speech where I possibly can. But, apart from maybe one or two sentences, he did not really address paragraph (c),
	"encouraging participation in activities relating to the National Lottery in general".
	He merely repeated what he said the last time, which was about the activities of the National Lottery promotions unit. He did not address the particular point that I made, about the drafting of that particular paragraph.
	We still have another stage of this Bill and I ask the Minister to take a further look at this issue. Rather than looking at completely the wrong paragraph, it would be helpful if he could look at paragraph (c) between now and Third Reading and see whether it has drafting flaws. I entirely agree that the distributors should be entitled to insist on National Lottery Day, with a National Lottery promotions unit and so on—there is nothing between us. What is between us is what that paragraph could be used to do, in terms of promoting, and participation in, the Lottery. I do not believe that there is any point of principle between us, it is all about what the paragraph actually says. I see the Minister nodding and I take huge encouragement from that. I look forward to Third Reading and beg leave to withdraw the amendment.

Lord Joffe: My Lords, this a rather gentle compromise amendment, imposing nothing on the Government, other than what it has already agreed to. It is just a question of reporting. This additional reporting would, I submit, bring transparency and clarity to the Bill, and has the potential to prevent misuse. For the reasons outlined by the noble Lord, Lord Clement-Jones, and the noble Viscount, Lord Astor, I support the amendment.

Lord Davies of Oldham: My Lords, I am grateful to the noble Lord, Lord Shutt, for the way in which he presented this amendment—although it is expressed in similar terms to the amendment that we had in Committee and the debate that we had then. I appreciate that he raises some interesting questions about the way devolution is reflected in the plans for the Big Lottery Fund, about the dynamics of the board and about the way in which grants will be distributed. I am also grateful to my noble friend Baroness Pitkeathley for identifying to him some of the difficulties which might occur if his amendment were to become part of the Bill.
	I listened to the noble Lord's arguments carefully but I have not changed my position, which I have no doubt that he will regret. The Bill currently provides for 12 board members, four of whom are appointed to represent the interests of parts of the United Kingdom. Those representatives will have an important part to play in chairing committees that will oversee devolved expenditure in the four parts of the United Kingdom. The National Lottery is, of course, a reserved matter; however, the areas covered by the Big Lottery Fund good causes—health, education, the environment and charities—have all been devolved. We have reflected that in the Bill. By creating the concept of devolved expenditure and providing for the committees to oversee spending, it ensures that decisions will be taken by those best placed to make them.
	As I said in Committee, devolution to the regions of England is a rather different matter. It raises the difficulties to which my noble friend Baroness Pitkeathley gave voice. Desirable as it might be for a whole host of reasons—and nobody is better equipped to identify them than the noble Lord, Lord Shutt, or to make the case for them with his usual forceful clarity—there is no statutory framework as there is with devolution to the countries of the UK. He will recognise that factor and, because of it, there is no specific provision within the Bill to reflect it. We believe that decisions on how best to ensure that there is an English regional dimension to its work are best made by the Big Lottery Fund itself. Why should the Government force a particular model on the fund? How would that sit with the concerns expressed today, and even more intensely in Committee, about the overall degree of government control of the lottery?
	I have concerns about increasing the size of the Big Lottery Fund board so drastically. It is a fairly substantial change that noble Lord, Lord Shutt, is recommending. The fund needs a UK board that is small and focused enough to provide a real strategic focus to its work. Having nine English regional appointees, as well as the four national-interest appointees, would risk creating a sort of mini-parliament rather than a coherent board.
	When the noble Lord, Lord Shutt, spoke equally forcefully in Committee, he made the point that the Community Fund had English regional committees, whereas the New Opportunities Fund did not. He reiterated that point today. He saw that as evidence of a New Opportunities Fund takeover. I do not accept that at all. The Community Fund had no statutory duty to set up English regional committees; it chose to do so as the most effective way to operate. It is entirely open to the Big Lottery Fund to act similarly. We believe that that is a decision for the fund itself; it is not a decision for the Government to make and to put on the face of the Bill. The Big Lottery Fund, of course, will operate in a somewhat different way from the Community Fund and the New Opportunities Fund. Sometimes the focus will be at national strategic level and sometimes at regional or even local level.
	Against that background, I understand that the Community Fund and the New Opportunities Fund, operating as the Big Lottery Fund, have decided against general English regional committees. They are in that position at present. The fund has said that it will have English regional representation on the national committees for individual funding programmes where that is appropriate. For example, its Reaching Communities programme will have representatives from each of the nine English regions because it is seeking to be in close contact with the regions. That will allow for regional perspectives to be brought into the decision-making process. The noble Lord will recognise that decisions are being taken that increase the regional dimension. The fund will also have a regional office in each of the English regions, whose primary role will be outreach work. The offices will spend time gathering regional intelligence, which will be fed into the assessment process.
	I hope that the noble Lord will recognise that the regional dimension is not being ignored. Where appropriate, arrangements will be made. We should leave the Big Lottery Fund to take up the decisions as appropriate, which has been the case in the past, but we cannot agree that we should put on the face of the Bill a rigid structure that, as the noble Lord, Lord Shutt, indicated, would in his terms advance the regional dimension, but might be crucially at the cost of the effectiveness of the overall strategic role which the fund has to fulfil. Of course, we have met the devolution dimension as regards the four countries of the United Kingdom. That is as far as we can reasonably be expected to go in legislation. I hope the noble Lord will consider that an adequate reply.

Viscount Montgomery of Alamein: rose to ask Her Majesty's Government whether the new European regime for the import of bananas is in the best interests of the United Kingdom.
	My Lords, we move to the vexed question of bananas. I am extremely grateful to the noble Lord, Lord Grocott, the government Chief Whip, for allowing me time for this debate in a crowded programme; and to the noble Lord, Lord Bach for making himself available to answer it.
	As this is an Unstarred Question, I have no right of reply, so I thank the various noble Lords who will speak in this short debate. Not all of them are quite here at the moment because it is taking place rather earlier than expected, but no doubt they will turn up. Some of the key figures are here, however. I have taken a few soundings in advance, and know that all the speakers will disagree entirely with what I am going to say. That is not an unusual state of affairs. I have been interested in the issue of bananas for a long time, and have always irritated the Front Bench of the day about it. I am returning to an issue which I used to pursue in the 1980s and 1990s.
	The dispute over the tariff for banana imports into the EU has not yet really been resolved. It goes back 13 years to the early 1990s, when the EU decided to regulate the market for imports. This regulation comprised a complex system of quotas, tariffs and licences designed to protect former colonies in Africa, the Caribbean and the Pacific—known as the ACP territories—against the Latin American bananas coming from what the Americans call the most favoured nations, or MFNs, referring to the Latin American producers in central and south America.
	Following a great deal of agitation from Latin America, led by Ecuador for south America and Costa Rica for central America, the WTO decided, quite rightly, that the EU system went against the principles of free trade. As part of the solution, it was agreed in 2001 that a tariff-only system of import controls should be put into effect from 1 January this year. Meanwhile, various interim measures were introduced which allowed the ACP countries to continue with a zero tariff for 750,000 tonnes per annum, and for Latin American bananas—which account for 60 per cent of EU imports—to pay €230 per tonne, as against the €75 originally agreed. Not surprisingly, as I am sure noble Lords will appreciate, the Latin American countries objected and, last year, a series of arbitrations ensued which tended to agree with the Latin American view. This has so far merely had the effect of reducing the Latin American tariff to €176 per tonne, while maintaining the zero tariff for the ACP quota. I have to admit that that does not seem fair, and I do not see how anybody could argue that it is.
	At the WTO summit in Hong Kong last December, the EU appointed the Norwegian ambassador to use his best endeavours to resolve the problem. There, as far as I know, the matter more or less rests, although I believe that there have been various interim measures in an attempt to protect the ACP countries' trade. So, once again, we have the EU, principally led by France, operating in a protectionist mode against the interests of consumers in general and, of course, Latin American producers in particular. "Free trade" means—or should mean—what it says. Indeed, the main purpose of the World Trade Organisation is to ensure that this happens. Unfortunately, so far it has not.
	The case for the ACP subsidy is usually based on the notion that if the small islands cannot produce bananas competitively they will turn to drugs. This is a specious and ridiculous argument at any time, since the production and illegal trading of drugs will always be infinitely more profitable than almost any other crop in the world. That is not a substitute for bananas. It would be the wrong kind of substitute. I am sure that there are other things that can be done in the Caribbean if necessary to support their industries and people. That is up to the individual countries concerned, but it should not be imposed on the world in general.
	My Question is to ask the Minister where we now stand, and to seek his confirmation that UK interests are best served by importing the best quality bananas from the most efficient source.

Lord Faulkner of Worcester: My Lords, I apologise to the noble Viscount for missing the first few seconds of his speech. The House got on to this debate very early and I was in Committee a little way away. I hope he will forgive me. However, I did hear the main part of his speech.
	It is over 15 months since we last debated this subject on a similar Unstarred Question asked by the noble Lord, Lord Newby. I am delighted to see him in his place. I was going to say that I was the only person to have spoken in both debates, but I assume that the noble Lord is standing in for the noble Baroness, Lady Miller of Chilthorne Domer, so he and I will be veterans of both campaigns.
	I declare the same interest that I did on that occasion. I was vice-chairman of the All-Party British-Caribbean Group, and an adviser over 25 years to the Fyffes Group in my business life before I joined your Lordships' House seven years ago. It is also relevant to report that I paid a visit to the banana growers of St Lucia in the Windward Islands under the auspices of the Commonwealth Parliamentary Association in May last year.
	The noble Viscount said that he would probably be a lone voice putting forward his point of view. I cannot speak for anyone else who will take part in this debate, but his surmise about what I am going to say is absolutely right. I speak as a friend of the Caribbean, which has been treated shamefully by the World Trade Organisation, the multinational Latin American banana exporters, and particularly the United States Administration.
	To some extent I exempt from this criticism the EU Commission, which has attempted to maintain a tariff structure which would give some protection to the African, Caribbean and Pacific countries which supply bananas to the European market. It was not its fault that the United States mounted trade sanctions against Europe at the behest of its multinational companies, which have substantial interests in Latin and south America even though not a single banana is grown commercially on the US mainland. As a result of attempting to accommodate the multinationals' bullying, the EU has tried to compromise with a new banana import regime, which—as often happens with so many compromises—satisfies virtually no banana-exporting country, whether Latin American or ACP.
	What we are stuck with now is a flat-rate tariff with no limit on import volumes, and preferential access for 775,000 tonnes of ACP imports. The EU had to agree to a tariff-only system as the price of ending the dispute in the WTO. But it said at the time that the new single tariff was intended to have the same effect on the market as the system of tariff quotas that it would replace. The system could have worked if the level of tariffs on imports from Latin America—the so-called most favoured nation suppliers—was set high enough to prevent the European market being flooded by bananas priced at such low levels that the ACP exporters could not compete with them.
	Originally the Commission said that the single tariff should be €230 on all MFN imports with no quota limit. This was thrown out in arbitration and a second proposal of €187 was put forward. The arbitrator refused to agree to that, saying that the Commission had not demonstrated that €187 would meet the required criteria. The Commission off its own bat then fixed the level at the still lower amount of €176.
	When I was in St Lucia last year, I asked the banana farmers and their representatives whether they agreed that the original figure of €230 would have been of sufficient value to keep them in business. Not one of them did. The banana growers who I met believed that a significantly higher level of tariff, perhaps as much as €300 per tonne, was required to prevent retail prices for bananas in Britain falling to levels that would make it uneconomic for them to continue to supply the market. Therefore, we can imagine how far €176 falls short of what is required. The farmers told me that their return has been falling steadily over recent years, not least because the cost of their inputs, particularly fertiliser derived from oil, has risen but the retail price of bananas in Britain has been falling steadily. It has fallen by 25 per cent in the past three years as a natural consequence of a world over-supply of bananas. The Windwards are, of course, treated less favourably than their immediate neighbours, Martinique and Guadeloupe, which, as overseas departéments of France, qualify for deficiency payments from the EU. Often they amount to over half their total returns.
	In the debate in your Lordships' House on 14 January last year, my noble friend Lord Evans of Temple Guiting, replying for the Government, suggested that diversification could be part of the solution for the Windward Islands. I discussed that with a number of the people I met, and it was clear that the scope is pretty limited. St Lucia operates a zero-tolerance policy towards drug production and trafficking, but there is worrying evidence elsewhere in the region that the ease of growing ganja creates just too great a temptation for some poor, previously banana-dependent island economies. I take issue with the noble Viscount, who said that that is just tough and they must try to do something else. I should say that the noble Lord, Lord Palmer, who cannot take part in this debate, was particularly keen that I should make this point about the risk of drug-growing as the alternative to bananas if the banana industry is damaged.
	It is clear that the islands' economies face catastrophe if any new EU banana regime effectively excludes or severely reduces fruit from traditional ACP sources. This is not scaremongering or crystal-ball gazing. There are already worrying signs that since the new EU banana regime started on 1 January, imports from Latin America are up by over 6 per cent, despite some supply problems caused by bad weather. Only last week the online news service for the fruit and vegetable trade—freshinfo—reported that the new regime had brought Guatemala back into the EU trade after several years' absence with the arrival of 113,712 boxes of Lola-branded fruit into Rotterdam. That was the first instalment of 8 million cartons of bananas which will come to the EU this year. Not surprisingly, this is upsetting exporters from Ecuador as Guatemala and, indeed, Brazil are undercutting their prices by some €3.50.
	Faced with this, it is hard to see the traditional Caribbean growers even getting to the starting line, and the situation would be even worse if the lobbying from Latin America to get the tariff even lower were to succeed. To go back to the terms of the noble Viscount's Question, how can the new European regime for the import of bananas be in the best interests of the United Kingdom if it produces the destruction of the banana-growing industry in Commonwealth countries—with which we have the closest ties—the exclusion of the exquisitely tasty, conveniently-sized fruit from the Caribbean in favour of what my wife and I regard as the large, cheap and nasty bananas from Latin America, and yet more price wars between British supermarkets to the further detriment of the smaller greengrocers and convenience stores? If ever there were a num question—one that expects the answer "no"—this is it.
	I hope at the very least that we shall receive an assurance from my noble friend that the Government will follow the example of their predecessors and fight to keep alive the Caribbean banana industry, specifically in the first instance by doing all that they can to obtain a satisfactory level for the single tariff and ensuring that there is no change in the way in which the quota is administered, at least before 2008.

Lord Foulkes of Cumnock: My Lords, my noble friend Lord Montgomery and I usually agree on almost everything—strangely, considering our different backgrounds and the other differences that we have. However, I am afraid that I do not agree with him today. Like my noble friend Lord Faulkner, I have interests to declare, but on both sides. I am president of the Caribbean-Britain Business Council, vice chairman of the Caribbean group in Parliament, vice-chairman of the Central American group and chairman of the Dominican Republic group, so I see both sides of the argument—a fatal thing for a politician sometimes.
	I see the argument that we should be moving towards free trade, but I must say to the noble Viscount that, at the same time, we must protect vulnerable countries, especially the small Caribbean islands whose economies have been so dependent—and remain so dependent—on bananas. There need to be helpful transitional arrangements. That is what the European Union has been trying to achieve. Like my noble friend Lord Faulkner, I commend what the Commission has been doing. It has been working extremely hard to try to square the circle in this very difficult situation where we must try to resolve genuine interests from Latin America as well as from the Caribbean.
	The European Union thought that it had found an acceptable solution, but it was challenged by the Latin American countries—the Central American countries in particular, as my noble friend Lord Faulkner pointed out. According to reports, Honduras, Panama and Nicaragua are threatening further legal action at the World Trade Organisation. Colombia, Costa Rica, Guatemala and Ecuador have been trying to establish a monitoring framework within the European Union with the object of demonstrating that their interests have been hurt. I hope that I will show today that they have not been hurt. However, Latin American bananas are mostly produced and marketed by big American companies such as Del Monte. The noble Viscount shakes his head, but I am not going to be critical—quite the reverse. Among Latin producers, marketers and distributors, Del Monte has made it clear that it supports the EU tariff-only regime at the €176 per tonne level. On 30 November 2005, its chairman noted that Fresh Del Monte Produce Inc was,
	"well-positioned to take advantage of its vertically-integrated production, outstanding quality, a shipping, distribution, sales and marketing network to more effectively compete in the EU banana market with an open-market, tariff-only system".
	If it is good enough for Del Monte, I do not understand why it is not good enough for the governments of Central American countries.
	Let us look briefly at the market share. In Europe's original 15 member states, 18 per cent of bananas are produced domestically—which is a little misleading because we include the Départments d'Outre-Mer in that. Some 63 per cent come from Latin America and only 19 per cent from the ACP in the traditional 15 countries. Of course, with the new member states, about 98 per cent come from Latin America so even more come from Latin America in those countries. Latin America is doing pretty well.
	Overall, Caribbean banana exports to Europe have been falling. In the four years to 2003, EC figures indicate that Caribbean banana exports fell by 7.6 per cent, so that they now account for only 36 per cent of total imports from ACP countries. The decrease has been especially marked in the case of the Windward Islands—very small vulnerable economies that we, as the main country in the Commonwealth, should have some concern for—with exports in the Windward Islands falling by as much as 50 per cent. That is in contrast to those of the Dominican Republic. I welcome what has been happening in the DR, which, over the same period, increased its exports to the EU by 159 per cent, so that it now accounts for around 14 per cent of all ACP banana exports to Europe.
	Perhaps I may touch on the implications of the new regime for ACP producers in the Caribbean. They pay once they have sold 775,000 tonnes—the tariff-free quota. They then pay the full duty rate beyond that. Some lower cost ACP countries, particularly in Africa, can afford to incur duty payments on part of their exports and still secure a remunerative return overall. But, without certainty of duty-free entry on their exports, there is concern in the Windward Islands and Jamaica that their trade will collapse. If it were to collapse the economic consequences would be dire. There is deep concern in those countries over suggestions that the whole of the ACP quota should be allocated on a first-come first-served basis. Someone has described what will happen as a boat race, with boats racing each other to get to the European Union markets first. That may be to some extent an exaggeration, but I think it indicates what could happen.
	As part of the negotiation of economic partnership agreements, European Commission negotiators are quietly urging Caribbean negotiators to seek quota-free entry for bananas and, indeed, for sugar in order to achieve something close to the equivalent of the "Everything But Arms" arrangements for the world's least developed nations. If that were to happen, it would effectively end the all-ACP banana protocol. It would also enshrine within a Caribbean EPA any new arrangement on bananas that some senior EC trade negotiators believe will be immune from any challenge. That certainly would be welcomed in the Caribbean.
	What happens now is far from clear. Lots of studies and options indicate different patterns of what might happen if we move forward on various scenarios. However, what unfortunately seems certain is that the losers will be the most vulnerable producer countries in the Caribbean. In contrast, the survivors, assuming some form of tariff protection of quota remains, will be those that have been able to enhance competitiveness, to diversify and to find higher-value market niches in fair trade bananas and organic bananas. All credit to them, because some of the Caribbean countries have been doing that effectively. But countries like Jamaica and Belize, where bananas and sugar grow side by side, will struggle to maintain a stable rural economy in the face of any new banana tariff regime, as envisaged by my noble friend Viscount Montgomery. The 36 per cent cut in the price paid by Europe to ACP sugar producers over the next three years will make it even worse: I do not like this phrase—a double whammy on these vulnerable economies.
	The Caribbean is in the process of restructuring—I know that well and I will turn to one aspect of that in conclusion—so that the newer economy of tourism and services can be better integrated. But that will take time. I think that, and I hope the Minister will agree, Europe and particularly the British Government have a responsibility in ensuring Caribbean stability. Without that the levels of narcotics and gun-related crime—and, I say to my noble friend Viscount Montgomery, that is not an idle threat—on British streets will rise. That will happen.
	I am off to the Caribbean tomorrow. I left that to the end because if I said it at the beginning it might colour noble Lords' views of my remarks. I am looking forward very much indeed to being an observer at the UK-Caribbean Forum where our Ministers will be participating with Ministers from Caribbean countries. I hope that—and I say this to the Minister—I can take a message of some hope for the future from the United Kingdom Government and the United Kingdom Parliament.

Baroness Hooper: My Lords, I am most grateful for being permitted to speak in the gap. I am in the happy position of being able to speak as the debate has been brought forward; the time originally envisaged for it would have made that impossible.
	I have listened with interest to the concerns expressed about the effects of the European Union regime on the producers of bananas. Having spoken up for the interests of Latin American producers in the past, and having spent a postgraduate year in Ecuador, I can assure the noble Lord, Lord Faulkner of Worcester, that the bananas produced there are great in variety and absolutely delicious. Noble Lords must go there and try them out on the spot. More recently, I visited St Lucia, Grenada and Antigua under the auspices of the Commonwealth Parliamentary Association, and I want to make a rather more general point. This is a question not only of the European regime or of bananas as a fruit, although I believe they are the most eaten fruit in the world and have all the qualities that the noble Lord, Lord Faulkner of Worcester, listed, but of finding ways to diversify the consumption of the banana and its by-products in order to provide a greater market for the producers wherever they produce this commodity.
	Small producers everywhere, but particularly in the Caribbean, have a special case. Many of them used to produce sugar, but the effects of the sugar prices and, indeed, the European Union sugar regime, among other things, meant that they chose to diversity into bananas. They have a particular problem because of the climate—we are all aware of the hurricanes that caused havoc in some of those tiny islands last year—so they need to be able to produce a crop that can be planted and reproduced within a short time if it is destroyed one year. Both sugar and bananas fall into that category. There is a special case to be made, which is why I urge consideration of further ways of using the banana. Like sugar, which is now finding another market in ethanol production as an energy source, bananas as a fruit could certainly produce some kind of energy source. A use could presumably be found even for the by-products of the banana—the foliage and the fibre, which is currently simply burnt and wasted and adds to environmental problems—as a biomass source of fuel. I therefore ask the Minister to say, when he replies, whether the Government can in any way urge the European Commission's Research Directorate, not its Agricultural Directorate, to set up some form of research into alternative uses for the banana and its by-products.
	At a recent CPA meeting here—perhaps the noble Lord, Lord Foulkes of Cumnock, will come across this when he attends his meetings in the Caribbean tomorrow—there was a suggestion that a research committee or research council should be set up in the Commonwealth, and particularly in the Caribbean, to look into this issue.

Lord Newby: My Lords, I should begin by apologising on behalf of my noble friend Lady Miller of Chilthorne Domer, who I understand is, as we speak, pulling into Paddington Station, believing that this debate was going to take place somewhat later in the evening. However, I am delighted to be able to step metaphorically into her shoes in that I initiated the previous debate on this issue a while ago. I also declare an interest as a former adviser to the Caribbean Banana Exporters Association. Therefore, the noble Viscount will not be surprised to know that I, too, disagree with his basic thesis on bananas.
	The debate raises a number of general issues and I am grateful to the noble Lords, Lord Faulkner and Lord Foulkes, for having filled in many of the details, unsurprisingly none of which I have to my fingertips just at the moment. It seems to me that the issues are as follows. First, will the new proposed banana regime have a serious, deleterious effect on the Caribbean banana market? It seems to me, that for all the reasons that have been given, the answer is unambiguously, yes, it will.
	Secondly, does that matter to any significant extent to either those Caribbean economies affected or to the UK? We have already heard why it matters to those economies. The islands that we are talking about—particularly the Windward Islands—are very small. Their population is barely the size of a London borough. They have been encouraged by this country over a long period to grow bananas. Interestingly enough, the Caribbean banana business was begun by a subsidy from Joe Chamberlain when he was in one of his more exuberant pro-Empire modes. It is funny how things change. But there is no doubt that for those countries which still grow bananas, the effect on the economy will be very serious indeed. The choices open to them are, in the short term, relatively small. Take a country like St Lucia. It cannot grow any other commercial crop, virtually at all, and never will be able to, for reasons which have been given. The terrain and the regular hurricanes mean that most crops are impossible to grow.
	While St Lucia is doing a tremendous amount in terms of developing its tourist industry, this takes a long time and it is by no means clear that a monoculture of tourism is going to be an entirely satisfactory outcome for the island either, given that most of the income generated by tourism rapidly leaves the island and does not filter down to people who are not working in the tourist industry. The effect on the economy will be serious.
	Another effect which has been mentioned is what will happen to people who are now growing bananas? Will they turn to growing drugs? The noble Viscount, Lord Montgomery, observed that they could have been growing drugs anyway because it is more profitable. That assumes that the banana growers are amoral and that they would equally grow drugs as grow bananas. That is grossly unfair to the population of the Caribbean, who are not amoral and who do not want to be growing drugs—they know the effects of drugs just as well as we do. But some of these people will be desperate. They are poor people already; they will become poorer and will turn to desperate measures—both in my view and in the view of many other independent commentators, not just here but from the US.
	The effect therefore on the Caribbean economies will be serious and the social effects, both there and here, will be serious. Does that matter to us? It matters on two grounds. First, there is the question of moral obligation, which has already been mentioned, and which we cannot wash away. But it also raises a broader issue about the way the WTO acts, particularly in relation to small, vulnerable states. Whatever we do for Caribbean bananas, in terms of their access to the EU market, will have a marginal effect on the overall, global banana market. As we have already heard, the percentage of the European market that in any foreseeable future will be taken up by Caribbean bananas will be small—single digits and reducing. The key issue that the WTO should address and has not addressed and our Government could urge it to address, is whether—in cases where there are small states who are not wealthy and which, for various historical reasons, have a special monoculture or a small group of products which form a small part of the market, the withdrawal of which would form a collapse in the economies—there is room for a waiver of normal WTO rules, at least on a limited basis and possibly on a diminishing basis, over an agreed period of years.
	Undoubtedly, the complainants in the WTO case, who have won their case and in doing so will destroy the Caribbean banana trade, have played by the book. I am sorry to say to the noble Viscount that they are immensely wealthy, extraordinarily effective and unscrupulous lobbyists in the States and elsewhere, which is, in one sense, neither here nor there. They have played, and won, by the book. The trouble is that the book is wrong in that respect. We should look at the book to see whether it can be amended, because we are now going into the ludicrous situation which noble Lords have mentioned.
	I am not sure how readily the geography comes to mind. But, thinking of the Windward Islands as a string of pearls, they are a French colony, a former British colony, a French colony and a former British colony. The French colonies get continuing protection: the British colonies get virtually none. Even going down the Windward Islands, the effect is discriminatory, bizarre or irrational and defies all logic. The one slight glimmer of hope, which the noble Lord, Lord Foulkes, said, is that some of these countries are growing organic and fair trade bananas. They are not the only ones who are doing it, and they should possibly have done that rather earlier. It was considered, but it did not happen. As we are always telling ourselves we must do, it gives them the chance to go up the value chain slightly.
	The real problem is that, without a more or less guaranteed volume of trade, particularly from the smaller islands, there will simply not be the shipping to deal with a slowly declining volume. The whole thing tends to fall off the edge, probably at a level of exports which is not much less than we have today. This is an important issue, which bears heavily on our responsibilities. It raises broader issues on how world trade will be carried forward. I look forward, as do other noble Lords, to the Minister's reply.

Baroness Byford: My Lords, I thank the noble Viscount, Lord Montgomery of Alamein, for introducing this debate. I believe that he will find that there are not many noble Lords who support his point of view, but it is good to debate it. For once, I have no interests to declare, which for me on agricultural matters is wonderful. In fact, I do not eat bananas either—when I was a little girl, they did not agree with me. As a sports person, I was told that I should eat them. Unfortunately, that was not possible.
	I do not propose to go over the ground which has been so well covered today. I have all the facts and figures, but it would be foolish for me to waste the time of the House going over what has been clearly put by noble Lords who have spoken already. I echo the noble Lord, Lord Faulkner, in his comment that the ACP countries have been treated shamefully. The noble Lord, Lord Newby, has underlined that it is even more unfair because of the position with the French colonies.
	I should like to take us further on. This debate has been going on for a long time and I want to raise several issues with the Minister. In January 2006, the organisers of the Second International Banana Conference proposed that the EU use the tariff revenue help fund to act and give more sustainable practices in all banana exporting countries. It made the following proposals: first, that the EU undertake a comprehensive evaluation of the existing EU banana import regime and its impact on poverty, income, wages, the environment and levels of development in all exporting countries, incorporating a gender analysis of these. Secondly, it proposed that the EU should support public programmes in producing countries to enforce international and national labour standards. Thirdly, the EU should fund and implement research and development programmes to improve occupational health and safety and environmental impact in banana production—something to which my noble friend Lady Hooper referred. Fourthly, the EU should fund and implement research and development programmes to find effective measures for preventing occupational and environmental risk in banana production. At this stage I began to wonder what on earth was meant by this, so I shall listen to the Minister with great interest. Fifthly, the EU should implement education and empowerment programmes in health and safety and environmental issues for workers.
	Sixthly, it proposed that the EU should fund and support initiatives promoted by not-for-profit, fair trade organisations, which facilitate small and disadvantaged producers' market access. Intervention programmes could include expertise or technical support; structural investments for improvements in production capacity; and the promotion of cultural initiatives to increase the awareness of consumers in northern countries. Seventhly, the EU should support and promote programmes ensuring fair contract and access credit for all producers. Eighthly, the EU should support and promote producer-led programmes that aim to help small farmers increase their productivity, cut their costs and engage in environmentally friendly production. Ninthly, the EU should initiate and financially support consumer education campaigns in order to increase consumer understanding that prices should promote sustainability. In other words, the EU should ensure that the social and environmental costs of banana production are covered, including living wages and decent livelihoods for workers and small producers.
	The conference's tenth proposal was that the EU should support financially and politically the creation of an international multi-stakeholder forum on bananas in order to tackle social, economic and environmental issues within the industry. Eleventhly, the EU should develop a proposal for differentiating tariffs on the basis of social and environmental criteria put forward by the conference organisers and look into trade barrier elimination and trade incentives for social compliance. Twelfthly, the EU should fund compensatory financial mechanisms for producers to help them meet the short-term price shocks and declining incomes which may result from EU market liberalisation. Finally, the EU should fund and support diversification programmes and initiatives of producer and/or worker groups which aim to replace current production and/or development of new markets or outlets for products, including where the workers have taken over production on plantations abandoned by companies.
	That is a big list. This conference was held in January. I hope that the Minister will be able to tell us a little more about it, because we need to move on. I have some questions on the above. How much money has been put aside to take some of these proposals forward? Has a separate body been established to manage these initiatives? If so, what timetable is in place? What input do the Government have into these discussions and the actions that I hope will result from them? Obviously, the Conservative Party's position is to believe in free trade in preference to barriers. However, I personally believe that we have a responsibility to former ACP countries and we should look at some of these proposals to see what we can do to move this agenda forward. My noble friend quite rightly raised the question of change in the sugar regime. It is a double whammy and it will be a very serious one for these countries.
	So although I have not agreed with the noble Viscount, Lord Montgomery, I thank him most sincerely, because this debate has given us a chance not only to reflect on where we are but to ask where we are going and what we can do to be effective. In that circumstance, I thank him most sincerely.

Lord Bach: My Lords, I begin by thanking the noble Viscount, Lord Montgomery of Alamein, for initiating and introducing this debate on the new European regime for the import of third country bananas. I also thank other noble Lords who have contributed so knowledgeably to the debate and, if I may say so, spoken with so much passion on this topic. I thank particularly the noble Lord, Lord Newby, who stood in at such short notice and spoke with such skill, which is not something easily done without a moment's preparation. But we are lucky that he is such an expert in this field. He opened a debate on this topic last January.
	As one could feel tonight, in this debate, in WTO terms the banana trade has had a troubled history. As has rightly been acknowledged, one cannot meaningfully assess the new regime for imports and its significance to suppliers, traders and consumers, without looking back, particularly at the legal framework. The EU regime for bananas did not come into being until 1993, individual member states having often had very different trading histories. Even after 1993 there followed years of well publicised and damaging international trade disputes, as first one import regime and then another was challenged and found wanting in WTO. It was not until 2001 that an understanding was reached at the Doha ministerial conference. That understanding provided for a phased transition away from the quota system, which had attracted so much criticism from exporters in countries with, in this case rather inappropriately named, most favoured nation status, to a tariff-only regime, which the EU was obliged to introduce by 1 January 2006.
	Under the interim arrangements which applied from 2001 to last year, bananas from the ACP producing countries could be imported free of duty up to a quota limit of 750,000 tonnes each year. Bananas from elsewhere were subject to a tariff rate of €75 per tonne against a quota limit of 2.65 million tonnes; over-quota bananas were subject to higher tariffs—€680—which were generally prohibitive.
	Last year saw important developments as the EU sought to honour its obligations arising from the 2001 understanding—in other words, to end the MFN quota and move to a tariff-only system. The EU secured a broad negotiating mandate from the Council, such that its aim was to maintain existing levels of protection and preferences for ACP countries, while respecting the Community's obligations and commitments to other trading partners, EU producers and EU consumers. Acting on that negotiating mandate, the EU Commission notified the WTO in January 2005 that it intended to replace its concessionary tariff quotas on MFN bananas with a bound duty of €230 per tonne.
	After limited negotiations, the MFNs invoked arbitration. In August, the arbitrator ruled that the Commission's proposals would not maintain MFN market access. Further attempts at negotiation were fruitless and, in the absence of agreement, the Commission itself invoked a second round of arbitration in late September on a revised proposal for a tariff level of €187 per tonne, together with a duty free quota for imports from ACP producer countries. Late October, the arbitrator ruled again that the EU had failed to rectify the matter, thus exhausting the procedures agreed in 2001. So we were in uncharted WTO waters, and it then fell to the Community to decide how to meet its tariff-only commitment. Please remember that it had to have a new arrangement in place by 1 January 2006.
	On 29 November last year, under our presidency, the EU agreed—by a narrow qualified majority—a new import tariff of €176 per tonne to apply to imports of bananas from most favoured nation countries. It was also agreed that the new import regime would include a duty free annual import quota of 775,000 tonnes for ACP bananas, also to apply from 1 January.
	Of course, I am well aware that ACP suppliers would have favoured a higher tariff than €176 or even an extension of existing arrangements. However, most favoured nations have equivalent weight on the other end of the rope calling for a lower tariff. Given the EU's obligations in WTO and after two arbitration decisions found against the EU, we believe that this was the best achievable result. Frankly, a result was needed—1 January 2006 loomed.
	Hitherto the ACP quota had been managed through the complex allocation of licences to traditional and non-traditional operators. As we have always imported the largest quantity of ACP bananas into the EU, its operators held the biggest share of the licences. However, as part of last November's agreement to move to a tariff-only regime, the Council of Ministers decided that the licence system for the ACP quota should be changed to provide access on a "first come first served" basis for at least 50 per cent of ACP imports. That change followed lobbying from production and trading interests based in West African and Caribbean countries with a less established history of exporting to the EU, from accession countries and from some longer established member states which favour freer trade mechanisms.
	In February this year, the bananas management committee adopted new rules for quota management. Sixty per cent of the quota will be made available on a "first come first served" basis. The remaining 40 per cent of the quota is still reserved for operators who previously held a licence. Importantly, those operators, mostly in this country, that hold such licences will also be able to take advantage of the "first come first served" share of the quota. Moreover, they should be able to manage their licences in such a way that they can use them at the end of each two month tranche of "first come first served" to offset the duty which would otherwise be payable. This is an option which is not available to non-traditional operators. I believe that it was a significant concession to the UK on the part of the Commission, as all other member states generally favoured a larger share for "first come first served", or, indeed, wanted to do away with historical licences altogether.
	It is also worth noting that the original proposal would have required UK operators to pay huge securities as deposits for quantities of licences which they stood no chance of obtaining. I do not hide from the fact that we anticipate further pressure for the licences allocated to traders on a historical basis to be further reduced in 2007. But there is still a reasonable prospect that some preference can be maintained for those traders until the ACP waiver expires at the end of 2007 and the new economic partnership agreements are expected to come into effect. Similarly, I do not hide from the fact that high-cost Caribbean producers face threats of competition both from MFN supplies and from cheaper West African bananas. It will be important that they can maintain a critical mass of production of sufficiently high quality to keep supply chains open. We will continue to defend the Caribbean interest as best we can within a World Trade Organisation compatible framework and as part of the EU.
	Assistance through the EU has been mentioned, in particular by the noble Baroness, Lady Byford. As regards the recommendations of the conference that she mentioned, we believe that several very sensible suggestions were made. We had no direct input into that but we hope that the Commission will consider those remarks carefully when looking at what can be done.
	Through the EU we have provided funding to the special framework of assistance—SFA—the European aid instrument to Caribbean banana exporting countries to help improve their competitiveness, and when that it is not possible, to assist with diversification into other economic activities. The implementation performance and release of SFA funds has been disappointing. DfID has been engaging with the Commission in Brussels and in the Caribbean itself to try to improve its performance.
	Through the UK's bilateral aid programme and contributions to multilateral organisations working in the Caribbean region, we are helping to create the conditions necessary to enable job opportunities. In regard to that, my noble friend Lord Foulkes and the noble Baroness, Lady Byford, mentioned the double whammy. It is indeed a double whammy for Jamaica and Belize, but the EU is committed to paying traditional aid for sugar, learning the lessons from the arrangements earlier agreed for bananas.
	The new tariff-only arrangement came into effect in January and the new arrangements for access to the ACP quota only fully from March. Frankly, it is too early to judge the impact on trade volumes and prices in what is a dynamic market, although the Commission is closely monitoring the situation, having accepted the offer that we heard about from the WTO from the good offices of the Norwegian Foreign Minister. This is important and helpful as the governments of several Latin American countries continue actively to oppose the adoption of the new tariff of $176 per tonne on most favoured nations' supplies.
	One cannot rule out further challenges or changes to the new import agreements, but it is key that the European Community can point to the fact that it has met its earlier commitment to introduce a tariff-only system by 2006.
	Turning to the consumer interest, our market will continue to enjoy bananas from a wide range of supplying countries. The discerning shopper can purchase according to label, country of origin, price, size and other factors, such as fair trade and organic, to suit individual tastes and ethical choice. As I am aware from reading the debate in the House in January last, several noble Lords—and we have heard it today—have a strong preference for the smaller, sweeter fruit from the Caribbean. I share their view that the slightly higher price that they command in retail outlets is one well worth paying. As consumers we can all have a big say in the marketplace through exercising choice.
	I shall conclude on the external arrangements. Against the backdrop of earlier disputes, and the Doha understanding reached in 2001, the new arrangements for imports of bananas to the EU was, and is, in the best interests of the UK. Failure to have met our WTO obligation would, first, put the EU in breach of international trade law, and on the back foot of any future negotiations. Secondly, it would place bananas back on the international agenda. Thirdly, it would risk damaging retaliation from trading partners. Lastly, it would risk loss of the very WTO waivers that continue to allow a duty-free preference for ACP exports to the UK and other member states.
	Finally, I shall deal with three points that were raised. First, the noble Baroness, Lady Hooper, in an intervention, asked about research for alternative use of banana by-products. We are sure that producers will look at all alternatives. That would be a legitimate use of transitional assistance, but the EU Commission would have to agree it with the countries concerned.
	The noble Lord, Lord Newby, made a point about arrangements discriminating in favour of French overseas territories. As he well knows, the difference is that those French territories are part of the EU. I should point out that the ACP benefits from a substantial degree of preference still at this time. Thirdly, I commend my noble friend Lord Foulkes—to whom we wish a safe journey tomorrow, while wishing that we could all go with him—on his balanced analysis. I agree that the Commission has worked hard to square the circle.
	We believe that the outcome which was achieved under our presidency at the end of 2005 was the best which could be obtained in what the whole House will understand were, and still remain, difficult circumstances.

House adjourned at twenty-five minutes before seven o'clock.
	Monday, 24 April 2006.